Rex blames govt policy for profit drop

Related Content

SYDNEY, Feb 27 AAP - Regional Express (Rex) has warned its full year profit could be down by as much as 40 per cent, with the airline's bottom line buffeted by government measures such as the carbon tax.

The regional airline said the outlook was negative given "increasing government taxes and regulations dampening domestic expenditure resulting in slowing passenger demand", and rising fuel costs.

"From the very first month of this financial year, we are seeing the catastrophic impact the various draconian government polices are having on regional aviation," Rex chairman Lim Kim Hai said in a statement on Wednesday.

"Not only have policies like the carbon tax increased cost significantly, there has also been a significant drop in passenger numbers due to government policies exacerbating the effects of a fragile global economy.

"Many regional carriers are now struggling for survival. If the government does not reverse tack very soon, we will see irreversible damage being inflicted by the destructive policies that they have adopted."

Apart from the carbon tax, Rex management has also previously blamed the end of a government rebate scheme for air traffic control charges and additional security costs for hurting profitability.

Rex said net profit slumped 33 per cent to $9 million in the six months to December 31, with revenue down 2.7 per cent to $135.4 million.

Passenger numbers fell five per cent in the half.

Profit guidance was for the full year result to be between 35 to 40 per cent below the prior year.

In addition to scheduled passenger operations, Rex also runs air freight and charter operator Pel-Air, a Dubbo, NSW, based airline Air Link and a pilot academy.

Trending Now

Quotes are real-time for NASDAQ, NYSE, and NYSEAmex when available. See also delay times for other exchanges. Quotes and other information supplied by independent providers identified on the Yahoo! Finance partner page. Quotes are updated automatically, but will be turned off after 25 minutes of inactivity. Quotes are delayed at least 15 minutes. All information provided "as is" for informational purposes only, not intended for trading purposes or advice. Neither Yahoo! nor any of independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. By accessing the Yahoo! site, you agree not to redistribute the information found therein.